Market Roundup
- EUR/USD 0.19%, USD/JPY 0.05%, GBP/USD 0.21%, EUR/GBP 0.07%
- DXY -0.17%, DAX 0.45%, FTSE 0.28%, Brent -0.04%, Gold 0.16%
- Trump delays tariff hike on Chinese goods, citing trade talk progress
- Facing threat of Brexit delay, British PM renews efforts for deal change
- No-deal Brexit riskiest for financial stability - BoE's Carney
- Germany to escape recession, says finance minister
- Yuan tops seven-month high, Aussie gains tariff hike delayed
- In tentative rollout, Zimbabwe banks start trading new currency
- Sterling rallies on talk UK government considering Brexit delay
- Oil up toward 2019 highs on supply, trade talks optimism
Economic Data Ahead
- (0830 ET/1330 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of January. The index stood at 0.27 in the prior month.
- (1000 ET/1500 GMT) The U.S. Census Bureau is likely to report that wholesale inventories rose 0.2 percent in December after posting a gain of 0.3 percent in the prior month.
- (1030 ET/1530 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of February. The index rose to 1 percent in the previous month.
Key Events Ahead
- (1100 ET/1600 GMT) Federal Reserve Vice Chairman Richard Clarida is expected to participate in "Fed Listens: A Conversation with Community Leaders in Southern Dallas," followed by a brief moderated discussion with Dallas Fed President Robert S. Kaplan.
FX Beat
DXY: The dollar index declined after U.S. President Donald Trump stated that sanctions on North Korea are on in full ahead of his summit with leader Kim Jong Un in Hanoi this week. The greenback against a basket of currencies trades 0.1 percent up at 96.36, having touched a low of 96.29 on Wednesday, its lowest since February 6. FxWirePro's Hourly Dollar Strength Index stood at -86.93 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro surged, after falling for three consecutive sessions, after Finance Minister Olaf Scholz stated that he expected Germany to escape recession, indicating to a subdued but upward trend in its and Europe's economies. The European currency traded 0.3 percent up at 1.1362, having touched a high of 1.1371 on Wednesday, its highest since Feb. 6. FxWirePro's Hourly Euro Strength Index stood at -85.13 (Slightly Bearish) by 1000 GMT. Immediate resistance is located at 1.1371 (Feb.20 High), a break above targets 1.1394 (Jan. 23 High). On the downside, support is seen at 1.1309 (10-DMA), a break below could drag it till 1.1289 (Feb. 18 Low).
USD/JPY: The dollar surged, halting a 2-day losing streak, on signs that China and the United States are closing in on a deal to end a months-long trade war that has slowed global growth and disrupted markets. The major was trading 0.1 percent up at 110.75, having hit a high of 110.95 on Wednesday, its highest since February 14. FxWirePro's Hourly Yen Strength Index stood at -135.28 (Highly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. wholesale inventories, Chicago Fed National Activity Index, Dallas Fed manufacturing business index and Fed Clarida’s speech. Immediate resistance is located at 111.05 (Feb. 13 Low), a break above targets 111.40 (Dec. 26 Low). On the downside, support is seen at 110.25 (Feb.15 Low), a break below could take it lower at 109.60 (Feb. 7 Low).
GBP/USD: Sterling advanced towards the 1.3100 handle amid growing expectations the British government might delay Brexit if Prime Minister Theresa May fails to secure support in parliament for her withdrawal agreement. The major traded 0.2 percent up at 1.3077, having hit a high of 1.3109 on Wednesday; it’s highest since February 1. FxWirePro's Hourly Sterling Strength Index stood at -102.80 (Highly Bearish) 1000 GMT. Immediate resistance is located at 1.3103 (Feb. 4 High), a break above could take it near 1.3160 (January 31 High). On the downside, support is seen at 1.3024 (5-DMA), a break below targets 1.2996 (21-DMA). Against the euro, the pound was trading flat at 86.77 pence, having hit a high of 86.66 on Thursday, it’s highest since Jan. 29.
USD/CHF: The Swiss franc edged higher as the greenback eased after U.S. democratic state governors said their party needs to challenge President Donald Trump's record on the economy as he seeks re-election next year. The major trades 0.2 percent down at 0.9987, having touched a low of 0.9981 on Wednesday; it’s lowest since February 11. FxWirePro's Hourly Swiss Franc Strength Index stood at 17.14 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.0054 (February 18 High) and any break above will take the pair to next level till 1.0111 (November 12 High). The near-term support is around 0.9961 (January 22 Low), and any close below that level will drag it till 0.9889 (December 7 Low).
Equities Recap
European shares rallied to their highest level since October, boosted by gains in carmakers and mining companies stocks.
The pan-European STOXX 600 index rallied 0.3 percent at 372.18 points, while the FTSEurofirst 300 index surged 0.3 percent to 1,464.46 points.
Britain's FTSE 100 trades 0.2 percent up at 7,193.24 points, while mid-cap FTSE 250 fell 0.3 to 19,210.47 points.
Germany's DAX rose 0.4 percent at 11,501.38 points; France's CAC 40 trades 0.4 percent higher at 5,235.46 points
Commodities Recap
Crude oil prices edged up, hovering toward 2019 high achieved last week as sanctions and political uncertainty tightened supply in several producer countries. International benchmark Brent crude was trading 0.3 percent up at $67.15 per barrel by 1055 GMT, having hit a high of $67.70 on Friday, its highest since November 19. U.S. West Texas Intermediate was trading 0.4 percent higher at $57.39 a barrel, after rising as high as $57.79 on Friday, its highest since the November 16.
Gold prices rose as the greenback eased after U.S. President Donald Trump said he would delay an increase in tariffs on Chinese goods. Spot gold rose 0.2 percent to $1,329.64 per ounce at 1059 GMT, having touched a high of $1,346.61 per ounce on Wednesday, its highest level since April 20. U.S. gold futures were steady at $1,332.70.
Treasuries Recap
The U.S. Treasuries slid during late European session as investors wait to watch the country’s 5-year Note auction, scheduled to be held today by 18:00GMT. The yield on the benchmark 10-year Treasury yield jumped nearly 2-1/2 basis points to 2.677 percent, the super-long 30-year bond yields traded 1-1/2 basis points up at 3.035 percent and the yield on the short-term 2-year surged 2 basis points to 2.512 percent.
The United Kingdom’s gilts suffered during Monday’s afternoon session, after the country’s Prime Minister Theresa May admitted that she would not be able to secure a new deal with the EU this week, and would instead aim for a ‘meaningful vote’ on March 12 (just seventeen days before the Article 50 deadline). However, the PM’s speech, scheduled to be held on February 26 will add further direction in the debt market. The yield on the benchmark 10-year gilts, rose 1-1/2 basis points to 1.174 percent, the super-long 30-year bond yields jumped nearly 2 basis points to 1.703 percent and the yield on the short-term 2-year traded 1-1/2 basis points higher at 0.763 percent.
The German bunds slumped during European session ahead of the country’s 10-year auction, scheduled to be held on February 27 by 10:40GMT. The German 10-year bond yields, which move inversely to its price, jumped 2 basis points to 0.119 percent, the yield on 30-year note also climbed 2 basis points to 0.738 percent and the yield on short-term 2-year remained 1 basis point higher at -0.554 percent.
The Australian government bonds jumped across the curve during Asian trading session even as trade talks progressed between the United States and China, with President Donald Trump also stating an extension of the March 1 deadline, in lieu of the ongoing progress. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 2-1/2 basis points to 2.072 percent, the yield on the long-term 30-year bond slumped 2 basis points to 2.628 percent and the yield on short-term 2-year hovered around 1.727 percent.
